4 Comments

Sarah D
25 January 2011 at 13:55

But haven't we translated "gold" into digital figures in a bank's computer, thereby rendering the worth of a bank, which used to be measured in actual gold reserves, into something effectively worthless. I don't think he was far wrong in this. Interesting list.

Lee
26 January 2011 at 07:06

True, but gold still plays a large part of our economy, there are still huge reserves of it in major financial institutions and we haven't been able to change any old metal into gold. It still holds huge value (in fact, it has been going up as people see it as a safe bet in times of financial strain).

SarahD
26 January 2011 at 12:00

So imagine a scenario where the world suddenly gets access to a massive amount of gold? Does it really underpin our economy to the extent that such a discovery would make a difference? When gold was found in Australia, the governor bullied the geologist who made the discovery into keeping silent for five years and publishing a falsified report into his findings, so that "the government could set in place structures to stabilise the impact on the economy". What this effectively meant was that people in the know could buy up the land, including the governor himself who made a killing, and the geologist was heavily criticised for his professional "blindness". I think Edison was making people think about what it really means to have a world economy so dependent on one substance. Is anyone of equivalent intellectual calibre making predictions for 2111, do you know?

Lee
26 January 2011 at 17:55

I think Edison was saying we would be able to produce as much gold as we wanted by turning any metal into gold (the long-time quest of alchemists), thereby making it worthless. As it happens, we can't. I don't think he was commenting on the use of gold in economics, merely that science would solve the problem of rarity. Most countries hold large reserves as 'store of value' (so a sudden influx would cause problems), he could have picked any other rare metal though. Gold was probably just the best known example. As he implies in the article, once it is abundant it loses value, not least because it is less useful in industrial application than most other metals.